EUR/CHF Approaching 1.2000 Floor: Time to Buy? – Trade Closed

Trade Closed: 2012-03-15 02:00


A lot has gone down since I bought EUR/CHF over a month ago, but the charts barely show it. The euro was in the headlines a lot, and the Greek debt crisis has pushed and pulled it across the charts. But against the franc, it hardly budged as the SNB’s commitment to defending the euro-Swissy peg at 1.2000 kept the pair from making any headway.

But the past couple of days were different. We actually saw significant movement in EUR/CHF! It’s aliiiiiiive! Traders have been selling off the Swissy ahead of today’s big event. Which event? Lemme enlighten you, homies!

Today, the SNB is set to make its monetary policy statement, and since it’s only held quarterly, many will tune in to hear what the central bank has to say. The general belief is that the SNB will make no changes to its monetary policy and keep its key rate near zero.

But many also think we may see upgraded outlooks for growth and inflation as well. Adding to that, there are a few market players out there who are still hoping that the SNB will raise its peg even higher. But what will happen if the SNB doesn’t raise its peg? I imagine it could lead to a slide in EUR/CHF.

Anyway, as the saying goes, “Beware the ides of March!” so I decided to play on the safe side and take profit ahead of this major event.

Closed trade manually at 1.2131: +94 pips / +0.94%

Although there is a chance that the SNB monetary policy may actually extend EUR/CHF’s recent rally, I see it as major event risk, and thus, a gamble. I want no part of that, homies! I’m more than happy to walk away with a few pips in my pocket!

Thanks for following this long-term trade, fellas! May the pips keep coming for us!

Trade Update: 2012-02-07 02:26

It’s been almost a week since I bought EUR/CHF, and though the pair hasn’t really moved much since then (it’s only up about 30 pips since I bought it), at least it’s been a headache-free ride!

If you take a peek at the charts, I think I was actually able to catch a bottom on this one! What luck!


R-E-S-P-E-C-T is what the market has been showing the SNB! I guess traders didn’t take the central bank’s jawboning and promises of defending 1.2000 lightly, as they’ve been very cautious about letting the pair fall towards this line-in-the-sand level. They’ve been so cautious, in fact, that EUR/CHF has actually started to drift higher, forming a sweet little uptrend in the process!

I’m not really expecting too much action in the coming days, but I do believe that this trade is a keeper, so I’m willing to keep it open for a while longer.

Another reason why I’m letting this trade ride is that I’m interested to see how SNB Governing Board Interim Chairman Thomas Jordan’s speech will affect Swissy price action later today (10:45 am GMT). I have a feeling he’ll have a thing or two to say about the SNB’s commitment to defending its peg, and I think that could ultimately work in my favor.

So for now, I’mma sit on the sidelines and give this baby room to breathe. Hopefully, it’ll keep sailing smoothly up the charts.

Thanks for following, fellas! I’ll keep you all posted!

Trade Idea: 2012-01-31 23:17

Back in early September, our buddies over at the SNB declared that they were pegging the franc to the euro at 1.2000. Five months later, EUR/CHF is now approaching that key level. Given the SNB’s history of following through, I think this could be a good trade opportunity for me!

EUR/CHF Daily Chart

As you can see, EUR/CHF has been steadily crawling lower over the past few weeks, making its way back to the floor at 1.2000. The question is, will the SNB hold true to its promise, or will it let EUR/CHF slide below that level?

Remember, former SNB President Philipp Hildebrand is out of the picture, as he and his wife were involved with an insider trading scandal. Mrs. Hildebrand bought some dollars just before the SNB intervened in the markets. Apparently, she forgot that her hubby was the HEAD of the central bank. Oops.

In any case, Hildebrand is out and now we’ve got Thomas Jordan (no relation to Air Jordan) as the interim head honcho of the SNB.

Now, I’ve heard some rumors that Jordan may soon be named as the permanent SNB President either this week or next week. Of more importance though, is that Jordan is expected to maintain the same monetary policy strategy as Hildebrand.

I wouldn’t be surprised if at his introductory statement, Jordan goes all-out and does some jawboning right then and there! Remember, the SNB even said it was thinking of setting the floor at 1.2500 instead!

With that in mind, I’m willing to bet (1% of my account) that the SNB will NOT allow EUR/CHF to dip too far below 1.2000.

Here’s what I’m doing:

Buy EUR/CHF at market (1.2037), stop loss at 1.1937, take profit at 1.2400.

I decided to buy now, as I’m not so sure if we’ll see the pair test the 1.2000 handle because I expect other traders to have interest at the current price as well. It may take a while before we see any action on this trade, but just like in football, I’m willing to grind this one out. Who knows – maybe Jordan will throw a Hail Mary and send this pair flying!

  • Camelman

    Can it be that easy !!!!! I hope so. I am in with you with 1.19 sl. Goodluck

  • TooEarly

    Too early boy.. The technical is still strongly bearish..

  • minstrel

    is this forex or is this gambling?

  • Forexchubby that a falling trade line at 1hr tf?

  • cda08

    wait until the pair successfully stay above 1.2053-1.2062 zone, below that zone isn’t safe for buy at this moment, and its absolutely mine view, plz do not apply this in your live trading until u r ready to accept loss from the prediction, thanks

  • Capnskahoshi

    Waiting a little while while for the bearish trend to ease up or the big “jawboning” event to happen then possibly enter with a little upward momentum. Otherwise it seems like it has good credibility as more of a fundamental trade.

    • cyclopip

      Yup, this is a fundamental trade more than anything else. It ought to put the SNB’s credibility to the test! 😉

  • Camelman

    Oh Man … I guess I was early getting a second loan on the house to trade this event :). Thanks cross-eye …. no regrets from my side

  • Esmailshaikh

    Great read and suggestions.. much appreciated it.  Im gonna wait till it crosses 1.2055 myself.. and then go LONG on this one..

  • No Suit Trader

    eur/chf moves to a 3 day high, following floor 1.22 rumor ?.  how ever this is just a rumor, but it has started the buying . 😉  GL

    • cyclopip

      Thanks, bud! Gotta love them rumors!;)
      I hope we get more of the same today!

  • Camelman

    Thanks cyclo. Good trade so far. I even got into your other eur/jpy trade. I might got out tonight though. Weekends scare me with Greece coming up with bombs every so often.

    • cyclopip

      I agree, mate! I closed my EUR/JPY trade as well.

      But I’m keeping EUR/CHF open (though I moved my stop to BE) since I have faith in the SNB’s commitment to defend 1.2000.

      Thanks for dropping by!

  • Nightcrusader

    What is the time scope of this trade?

  • cyclopip

    Apologies for the overdue update! Hope some of you were able to bag some pips on this trade as well!

  • Forex trading guide

    A little while while for the bearish pattern to convenience up or the big “jawboning” occasion to occur then probably get into with a little upwards strength.